Compass Pathways, a company researching a therapy using the main ingredient in hallucinogenic mushrooms, expects its IPO to price at $14-$16 a share. That potentially gives it a valuation of as much as $544 million.

The London-based company announced the details in a filing late Monday. Compass Pathways filed for the IPO late last month. It hopes to trade on the Nasdaq Global Market under the ticker CMPS.

Additionally, if approved, the IPO would be the first from a pure-play psychedelic-drugs developer to go public.

Meanwhile, the industry has jumped into the spotlight over the past year, as more investors pour their money into startups promising treatments for a range of mental illnesses.

With that trend have come concerns about a repeat of the cannabis industry’s boom and bust. It is a business where most existing drugs — like LSD, MDMA and psilocybin — aren’t yet legal or patentable.

Compass Pathways IPO Terms

Compass Pathways plans to offer 6.7 million American Depositary Shares, and raise up to $107.2 million. It has also granted the underwriters of its IPO a 30-day option to buy an additional 1,005,000 American Depositary shares.

The company will have around 34 million shares outstanding after the offering, or 35 million if the underwriters fully exercise the option.

Cowen, Evercore ISI and Berenberg are the joint book-running managers for the Compass Pathways IPO. Canaccord Genuity, already an active deal maker in the cannabis industry, is the lead manager.

Compass Pathways has developed a crystalline form of psilocybin, called COMP360, for which it has a U.S. patent. Psychedelic drug developers, if they want to be profitable, will likely have to develop novel drug compounds and drug-delivery methods. A path similar to the legal pharmaceutical industry.

The drug developer plans to use COMP360 in conjunction with therapy for treatment-resistant depression. If regulators approve, Compass plans to market it to clinics and health care providers in the U.S. and Europe.

The FDA in 2018 gave breakthrough status to COMP360. Last year, the agency approved the Johnson & Johnson (JNJ) drug Spravato, which uses a derivative of ketamine, for treatment-resistant depression. This summer, the FDA approved Spravato for people who are actively suicidal.

Ketamine — perhaps best known as a party drug — is regularly used, legally, as an anesthetic. Therapists also use ketamine for psychedelic-assisted psychotherapy.